Taking a picture of a wrecked car

What to Expect When You File an Insurance Claim

Impact On Premiums

Fender benders and the like are an anticipated part of life, and though you're protected with auto accident insurance, you may still have concerns about what's going to happen to your insurance rates when you file a claim. Will your rates go up, and if so, how much? Will your policy be canceled? What if the accident wasn't your fault? What if it was?

There are no simple answers to these questions, as the process of establishing auto insurance premiums is very complex, and each accident is analyzed using many variables, including fault, history of accidents, moving violations and auto insurance claims, as well as age, car type and much more.

  • Not your fault: If the accident is not your fault, it's the first in which you've been involved, and your driving history is free of moving violations and/or insurance claims, you may have no premium increase at all.
  • Your fault with property damage: If the accident is your fault, but it resulted in property damage only, you will probably not lose your good driver discount. It may, however, trigger an increase in your premium.
  • Your fault with bodily injury: If you are at fault and someone is injured you will most likely lose your good driver discount and could see a 20 to 25 percent premium increase.
  • Non-renewal & cancellation: Your insurance company may also decide not to renew your policy if your driving record gets markedly worse or you have several auto accident claims. Different insurers have different rules about what constitutes an unacceptable driving record, but there are a few accidents, such as those caused by drunk driving, that will probably trigger a non-renewal from virtually every insurance company.

Practices vary from company to company, but in general, an insurer will increase your premium by specific percentages for each chargeable claim made against your policy above a specific dollar amount. A chargeable claim is one the insurer considers primarily your fault. The percentages and ceilings vary from company to company. These increases generally stay on your premium for three years following the claim.

Save Money & Time

Some accidents may involve little damage and will be under your deductible, so you may be inclined to circumvent the process of filing an auto accident insurance claim and just fix the damage on your own. This is a mistake that could cost you thousands, if not hundreds of thousands of dollars, because what seems like a little fender bender could turn into an injury claim. By reporting the accident, you are now protected against future claims because your insurance company will now have a record of the damage and will be able to defend you in the event that you are sued.

Mercury customers have the option to arrange for repairs at a trusted facility, and can take advantage of the company's pricing discounts. In most cases, the reporting of this fender bender will not affect your premium and it will end up saving you money in the long run.

Don't Do It Alone

Insurance professionals can spot red flags and are trained to deal with people and resolve problems, which takes the adversarial component out of the equation. When people try to adjust their own claims, they are an involved party and it often gets emotional.

Driver's Rights

The process of filing an auto accident insurance claim is regulated by the state's Department of Insurance; however, in a competitive auto insurance market, great service from the claims department can set an insurance company apart from the pack.

In California, drivers' rights under the Fair Claims Settlement Practices Regulations of the Department of Insurance (www.insurance.ca.gov) mandate that insurance companies assist in the following way:

  • Advise you of all benefits, coverage, time limits or other provisions of your insurance policy.
  • Acknowledge a claim, start an investigation, provide forms and instructions and provide reasonable assistance immediately (in no more than 15 days) after receiving notice of a claim. (Notice of claim is any written or oral communication to the insurance company that reasonably apprises the insurer that you wish to make a claim.)
  • Respond immediately to communications received from you (in no more than 15 days).
  • Accept or deny the claim immediately (in no more than 40 days) after receiving proof of claim. (Proof of claim is documentation in your possession which provides any evidence of the claim and supports the magnitude or the amount of the loss, such as estimates of repair or police report indicating theft of your vehicle, etc.)
  • Pay reasonable towing expenses, unless the insurer has provided you with the name of a specific towing company prior to your using a towing facility.
  • Offer a fair settlement. If you suffered a total loss, settlement must include taxes, license and transfer fees. The settlement must reflect the value of comparable deductions from the settlement for salvage and must be fair, measurable and discernable.
  • Pay the claim no later than 30 days from the date settlement was reached on an accepted claim.
  • Advise you whether or not they will sue the other party to recoup payments they have made to repair your vehicle (a.k.a. subrogation). If the insurance company does pursue subrogation, they must include your deductible unless you've already recovered your deductible.

The bottom line is never make assumptions when you've been in an auto accident and do not try to be your own claims agent. If you've been in an accident, contact your insurer, get the dialogue going and the process started on what needs to be done to protect your needs and get you and your vehicle moving again.

Additional Resources

How to File a Claim